- The prospect of a soft landing lifts oil prices
- Rally builds on efforts by Russia and Saudi Arabia to boost prices
- A break of $80 could be another big step
Oil prices have been understandably lifted by the US inflation release today as it could be seen to increase the possibility of a soft landing.
Brent was already trending higher though and is now at its highest point since April, having already broken out of the range it traded within for the last couple of months.
The next level for Brent to overcome is $80, which would be a big psychological leap. That may also see WTI break above its June high following the spike on the 5th.
The move higher also suggests the latest efforts of Saudi Arabia and Russia are working in tightening the markets and boosting prices after multiple failed efforts.
A bullish breakout in Brent?
Not only would a significant break of $80 be a big psychological move, but it would also come on the back of a break above the 55/89-day simple moving average band and the descending channel it traded mostly within over the last couple of years.
Brent Crude Daily
Source – OANDA on Trading View
The next major resistance zone above here could come around $83-$84.50 where the price could come into contact with the 200/233-day SMA band.
As far as support is concerned, the mid-May and June highs around $78.70-$78.80 could be interesting, as could the 55/89-day SMA band which coincides roughly with the peak a few weeks ago. A rebound off either of these could be viewed as bullish confirmation of the initial breakout.
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